Internet gambling seen as technology-job creator for New Jersey

Internet gambling is supposed to be the new job creator for Atlantic City, with online companies promising hundreds, if not thousands, of new employees will fill the ranks.

But unlike the cocktail servers, bartenders, blackjack dealers, cooks, housekeepers and other service-oriented positions that have dominated the casino industry in the past, many of these new jobs will be in information technology.

PokerStars, Bwin.party, 888 Holdings, 2UP Gaming and other major Web companies that operate gambling sites overseas are preparing to enter the New Jersey market when online betting goes live. Nov. 26 is the scheduled start-up date.

Some of those companies are talking effusively about the number of new jobs they plan to create, while others are taking a more cautious approach. However, all of them insist Internet gambling's potential for job growth is not mere hype.

"All of the jobs I'm talking about are absolutely New Jersey jobs," said William J. Pascrell III, a state lobbyist who represents PokerStars.

Pascrell said job growth was a key factor in getting the Legislature and Gov. Chris Christie to support Internet gambling. The governor signed the legislation in February, allowing New Jersey to join Nevada and Delaware as the only states so far to legalize online wagering.

"That (job growth) was a major impetus for the sponsors in the Legislature. In addition, I believe that is what brought us over the goal line for Gov. Christie," said Pascrell, who was part of the lobbying efforts for Internet gambling.

The extra jobs and hundreds of millions of dollars in projected new revenue that online gambling would bring are needed as Atlantic City continues to lose market share to casinos in surrounding states.

Atlantic City's gambling revenue has fallen more than 40 percent, from its 2006 peak of $5.2 billion to $3 billion last year. About 10,000 jobs have been lost in recent years. Casino employment has gone from about 45,000 workers in 2005 to just less than 35,000 this year, according to the most recent figures compiled by the New Jersey Division of Gaming Enforcement.

Spectrum Gaming Group, a casino consulting firm based in Linwood, estimates Internet wagering will immediately generate about $400 million in annual revenue for the Atlantic City casinos.

Estimating the number of new jobs created by Internet gambling has been more difficult. Robert Heller, president and CEO of Spectrum Gaming Capital, a Spectrum Gaming Group company, said much will depend on how closely the casinos collaborate with their Web partners to generate jobs and draw visitors to Atlantic City.

Heller warned that if the websites don't complement the brick-and-mortar operations at the casinos, the economic benefits of Internet gambling for Atlantic City won't be nearly as great. He noted that would include the new jobs created to support the websites.

"Those jobs may be anywhere. They may be in New Jersey, or they may be in another country," Heller said. "IT positions will be one source of jobs. You can also spend a tremendous amount of money for customer acquisition, so it could be a lot of new marketing people. But where will the jobs be created?"

During remarks in May at the East Coast Gaming Congress in Atlantic City, Pascrell estimated Internet gambling would create about 2,000 jobs for New Jersey in the first year. Pascrell said PokerStars alone is planning to add hundreds of new workers to its payroll as part of its Internet gambling partnership with Resorts Casino Hotel. PokerStars, the world's biggest poker website, joined up with Resorts after its attempt to buy the Atlantic Club Casino Hotel collapsed.

PokerStars, like other Web companies that are planning to launch online wagering, must secure a New Jersey Internet gambling license. Pascrell said PokerStars, once it is awarded a license, will immediately hire 50 new employees in Atlantic City to install the digital infrastructure needed for Internet wagering.

In addition, he said, PokerStars is committed to using Atlantic City as its North American headquarters for Internet gambling. PokerStars plans to hire about 150 workers in New Jersey for its North American headquarters by the end of the second quarter of 2014, Pascrell said.

There is speculation that New Jersey, Nevada, Delaware and other states will eventually enter into compacts to create a nationwide system of online betting. PokerStars may also create an additional 200 jobs next year in New Jersey, depending on how successful Internet gambling becomes and how quickly the multistate compacts evolve, Pascrell added.

In one final piece of its plans, PokerStars will begin building a $10 million poker room at Resorts as soon as its Internet gambling license is approved, Pascrell said. The project would be supported by new jobs for poker dealers, casino managers and marketing personnel.

London-based 2UP Gaming is planning to hire more than 1,000 people to support its Internet gambling operations in New Jersey, spokesman Vince Crandon said. But 2UP's plans depend on the company buying an Atlantic City casino. Crandon, who is part of the financing for the 2UP investment group, is overseeing efforts to acquire an undisclosed Boardwalk casino.

2UP's website combines real-life dealers with online wagering. Crandon said 2UP's new employees would include new poker dealers, as well as a host of IT workers, to support the New Jersey Internet operations.

"I've got great talent on the Internet side. I've also got great talent on the bricks-and-mortar side," Crandon said.

Online gambling operators are not guaranteed a New Jersey license simply by filing an application. They will undergo an extensive background check and must meet the state's regulatory requirements for a license.

Speculation has been building that PokerStars might have a difficult time winning a New Jersey license because of its legal problems in the past. PokerStars agreed last year to pay $547 million to the U.S. Department of Justice and $184 million to poker players overseas to settle a lawsuit alleging the company was involved in money laundering, bank fraud and illegal gambling. PokerStars admitted no guilt or wrongdoing in the settlement, which opened the door for the company to seek a license in U.S. casino markets where Internet gambling is legal.

Seth Palansky, a spokesman for Caesars Interactive, an online affiliate of casino operator Caesars Entertainment, said it is hard to guess how many jobs will be created by Internet gambling because Web companies are still concentrating on getting their licenses.

"It's dangerous to start hiring and to ramp up when you don't have licenses yet, and it doesn't happen in the timeframe you want," Palansky said.

Caesars Entertainment, owner of the Bally's, Caesars, Harrah's Resort and Showboat casinos in Atlantic City, is teaming up with 888 Holdings and Amaya Gaming Group for online betting in New Jersey. Palansky said other Web partnerships are possible for Caesars in the future.

Despite uncertainties about licensing, Palansky expressed confidence that Internet gambling will ultimately create new jobs and new spinoff business for New Jersey. For instance, media companies will benefit from paid advertising that promotes Internet gambling, he said. Technology providers and telephone companies providing WiFi and other Internet services are also expected to profit.

"There's a whole array of things to expect," Palansky said of the broader economic benefits.

Bwin.party, owner of the partypoker.com and World Poker Tour brands, has a partnership with Borgata Hotel Casino & Spa for Internet gambling. Bwin.party spokesman John Shepherd declined to say how many new employees the company plans to hire for its Atlantic City operations. But he predicted Internet gambling will create thousands of jobs nationwide, with New Jersey well-positioned to capitalize on it.